What Is the Maximum Limit on an ISA?
In April 2009, Chancellor Alistair Darling announced that the maximum limit on an ISA was increasing from £7,200 to £10,200 per year. This means that a maximum of £5,100 can be put into a cash ISA, while the remainder can be put into a stocks and shares ISA.However, it’s worth noting that these limits only apply to those aged 50 or over, and the limit increase will be in effect from the 6th of October, 2009. It’s believed that there are about 18 million ISA account holders in the UK, with approximately five million of them using their full allowance each year.ISAs were first introduced in the UK by Gordon Brown, who was then the Chancellor of the Exchequer in Tony Blair’s government. They were developed primarily to encourage the British population to get into the habit of saving regularly, and this is only the second time that the annual limits have been increased.Naturally, many investors still have some concerns though. If ISA interest rates continue to drop, or fail to rise significantly over the coming years, the interest gained from such ISAs will be minimal at best. The minor rise to cash ISA levels would only garner around an extra £50 per year in tax-free cash, so the government’s move is unlikely to help impoverished savers with their monthly income.Still, if you are someone who has been contributing to an ISA over the past few years, and plan to continue to do so for the foreseeable future, this increase to the maximum annual limit will be a welcome one.
